Implementing Health Reform. On October 19, 2015, Judge Rosemary Collyer of the federal district court for the District of Columbia denied the government’s request for an expedited appeal in House v. Burwell. This means that Judge Collyer is going to decide the merits of the House’s claim before an appellate court has the opportunity to decide whether she has the constitutional authority to do so. This could have a destabilizing effect on insurance markets.
The House of Representatives brought this lawsuit challenging both the Obama administration’s delay of the Affordable Care Act’s employer mandate and its reimbursement of health insurers for cost-sharing reductions for low-income enrollees in the absence of a specific line-item appropriation to cover the reimbursements. The administration asked Judge Collyer to dismiss the challenge, arguing that the House was not uniquely injured by the administration’s actions and thus could not sue; the court, therefore, had no authority under the Constitution to hear the House’s claim. Moreover, the administration argued that there was no legal basis for the House’s suit and that the court would violate constitutional separation of power principles in hearing the claim.
On September 9, Judge Collyer sided with the administration with respect to the employer mandate delay but held the House could proceed with its challenge to the cost-sharing reduction payments. Judge Collyer concluded that the administration’s reimbursement of insurers potentially infringed on the constitutional authority of Congress to appropriate funds and thus could cause an injury to Congress sufficient to support a lawsuit. She also held that there were viable legal theories for such a lawsuit.
The administration next asked Judge Collyer, to allow it—in light of the seriousness and novel nature of the House’s claim—to appeal her decision on jurisdiction immediately to the D.C. Circuit Court of Appeals, rather than waiting for a final decision on the merits. In denying the government’s request for an expedited “interlocutory” appeal, Judge Collyer held that her earlier decision had decided a controlling question of law as to which there was substantial grounds for disagreement, but an immediate appeal to the D.C. Circuit would not materially advance the ultimate termination of the litigation. Thus, she wrote, the statutory requirements for an expedited appeal were not met.
The judge concluded that the case would move more quickly if she decided the merits first, so that the appellate court could simultaneously decide whether her decision on the merits was right and whether she had any authority to decide the question in the first place. She set the case for a briefing schedule under which final briefs will be filed by January 18 and an oral argument scheduled thereafter.
Judge Collyer’s decision means that the Court of Appeals will only get a chance to decide the very important question of whether a federal court has any business intervening in a dispute between Congress and the administration over the expenditure of federal funds after Judge Collyer has in fact intervened in this dispute. Her decision also raises serious questions as to the continued funding of cost-sharing reduction payments, which substantially reduce the cost of health care for over half of ACA premium tax credit recipient, just days before the 2016 open enrollment period begins.
If Judge Collyer rules that insurers cannot be reimbursed for the cost-sharing reductions they are required to provide to low-income enrollees unless Congress enacts a specific appropriation, insurers would face substantial costs which are not covered by their current premiums. This could introduce serious instability into insurance markets, particularly after the Obama administration’s recent announcement that marketplace insurers would only receive a fraction of the “risk corridor” payments—designed to compensate insurers for higher-than-expected costs in an unfamiliar market—that they are owed because of limits that Congress had placed on risk corridor payments for this year.